Changes in the stablecoin market
Stablecoin market capitalisation has decreased for the 18th month in a row, declining to $124 billion. This is the lowest it's been since September 2021. The share in the total volume of coins also continues to decline, reaching 11.6% of the crypto market's total capitalisation. It reached the highest point of 16.6% in December 2022.
Trading volumes that involve stablecoins may also continue their downward trend. They amounted to $462 billion in August and as low as $174 billion in the first 18 days of September. Last year, the trading volume exceeded $1 billion.
Among the old-school stablecoins, only USDT strengthened its position over the past 12 months, reaching a market capitalisation of $83 billion. USDC lost about half of its value, dropping to a capitalisation of $25 billion after the March crisis in US banks that held the coin as collateral. BUSD is also living out its last days. In February, the stablecoin will no longer be supported by Paxos and Binance.
Binance is garnering interest in newer coins. Since March, the crypto exchange has promoted zero-commission transactions on TUSD, bursting trading volumes several times over. However, the stablecoin's lost peg to the US dollar in June has disappointed users.
Binance now offers zero commissions on trading FDUSD. The coin of the Hong Kong-based First Digital Group was released three months ago. Compared to August, its capitalisation increased by 22% to $394 million.
Capitalisation and trade volume drop, on the one hand, due to a significant rise in crypto value. Since stablecoins serve as a link between fiat money and digital assets, interest in them leads to Bitcoin's price growth. However, over the past six months, it's been stuck within the $25,000-$30,000 range.
On the other hand, the trust in stablecoins was undermined by the collapse of some projects, unpegging USDC and growing pressure from the US and European regulators. This has reduced interest in stablecoins as a store of value.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)